Biofuels are inefficient, cause hunger and air pollution, and cost taxpayers
billions

Last week, the EU missed an opportunity to end the most wasteful green programme of our time – one which costs billions of pounds annually and causes at least 30 million people to go hungry every year. By failing to agree a cap on the use of biofuels, the Council of Ministers has given tacit support for a technology that is bad for both taxpayer and environment. Legislation will now be delayed until 2015.

The biofuel story is a perfect example of good intentions leading to terrible outcomes. Moreover, it is a lesson on how powerful, pseudo-green vested interests can sustain a bad policy. Hopefully, it will also be a story of how reason can prevail in the divisive climate debate.

Greens initially championed biofuels as a weapon against global warming, claiming they would emit much less CO2 than fossil alternatives. As plants soak up CO2 while growing, the subsequent combustion simply releases the CO2 back into the air, resulting in zero net emissions.

Studies show that as land is dedicated to energy crops, land for food is simply taken from other areas – often forests – leading to substantial CO2 emissions. And processing biofuels emits CO2, drastically reducing benefits.

In the EU, crop-based biofuels have replaced 5 per cent of fuel used in transport. If the biofuels were emission-free, that would reduce emissions by 5 per cent – totalling about 59 million tons (Mt) of CO2 each year by 2020.

Thus the total EU savings would be a minuscule 5Mt, or about one-tenth of one per cent of total European emissions. Even over a century, the effect of these savings would be trivial. When run in a standard climate model, EU biofuel use will postpone global temperature rises by 2100 by just 58 hours.

And the cost to taxpayers is some £6 billion a year; each ton of CO2 avoided costs about £1,200. The EU’s “cap and trade” system is estimated to cost less than £4 for each ton avoided – so we pay almost 300 times too much.

Moreover, the best economic estimates suggest that cutting a ton of CO2 emissions saves the world about £4 in environmental damage. So for each pound spent on biofuels, we avoid about a quarter of one penny of climate damage –an extremely inefficient way to help the world.

Sadly, this will get even worse. Originally, the EU wanted almost the full 10 per cent renewable-energy target for transport to come from biofuels by 2020, a doubling of today’s figure. Now that everyone is having second thoughts, the proposal is to reduce this to 7 per cent.

But the Council of Ministers’ failure to implement even this modest reduction leaves us back at 10 per cent, which could double the cost for EU taxpayers to about €13.8 billion per year. Getting 10 per cent of transport fuel from plants would reduce the EU emissions by a tiny 9Mt, and increase the cost of each ton of CO2 cut to more than £1,260. The net effect to temperatures by the end of the century will be just 0.00025C.

Crucially, the huge expense and tiny benefit is only a small part of what is wrong with biofuels. In almost all aspects, they are a disaster. Current EU biofuels take up an area of European farmland larger than the size of Belgium, and a similar area is used internationally for European imports. The biofuel farmland in Europe uses as much water as the rivers Seine and Elbe combined.

Moreover, farmers use fast-growing trees like poplar, willow and eucalyptus for biofuels. Unfortunately, these trees emit a chemical called isoprene, an air pollutant which can affect human health. A study by Lancaster University shows that increasing the crop fields to meet the EU’s 10 per cent target will increase air pollution, cause an extra 1,400 deaths, and cost £5.2 billion annually.

But most importantly, in moral terms, is the fact that using land to grow fuel rather than food is an abomination in a world where almost a billion people still go hungry. It is estimated that European biofuels now take up enough land to feed 100 million people, and the United States’s programme takes up even more.

Although biofuels are not the only reason for the price increases in food over the past years, they certainly play a large part. It is hard for poor people to buy food when well-meaning Westerners drive up the prices with heavily subsidised biofuels. It is estimated that 30 million people are starving as a direct result of biofuels. And if we don’t reign in the biofuels juggernaut, models show that another 40-135 million people could be starving by 2020.

Why do biofuels persist? The simple answer is Big Green. Tens of billions of pounds in subsidies and tax breaks buy an awful lot in vested interests. As Al Gore said, “It’s hard once such a programme is put in place to deal with the lobbies that keep it going.” He admits pushing for increases in biofuel programmes because they helped farmers in his home state, Tennessee, and were popular with farmers in Iowa, crucial for any presidential hopeful.

The costs of global climate policies is running at about $1billion every day. Wind turbines cost 10 times the estimated benefits in terms of emissions cuts, and solar panels cost close to 100 times the benefits. Yet, with spending on these technologies of about £136 billion annually, there are a lot of interests in keeping the tap open.

But opposition to the rampant proliferation of biofuels also shows the way to a more rational climate policy. If we can stop the increase in biofuels we can save lives, save money, and start finding better ways to help. This is about investing in more productive agriculture that can feed more people more cheaply while freeing up space for wildlife.

And for now, it is just about saying stop to the immoral biofuels madness. Not just by timidly capping targets, but by stopping its use altogether.

Bjørn Lomborg is director of the Copenhagen Consensus Centre. His new book is 'How Much Have Global Problems Cost the World? A Scorecard from 1900 to 2050’